§ 89 — Payment of debts of illegal corporations

§ 89. Payment of debts of illegal corporations. Whenever an attempt\nhas been or is hereafter made to create a municipal corporation, either\nby special act of the legislature or by proceedings taken under the\ngeneral laws of the state, and such corporation has chosen officers and\nhas exercised the powers, duties and authority vested in it by the law\nunder which it purports to have been created, and such corporation has\nbecome indebted to any person, association or corporation in the\naggregate amount of five hundred dollars or more, and such corporation\nshall have been held or declared to be no corporation by a court of\nrecord of competent jurisdiction of this state, either because the\nspecial act creating it is declared to be unconstitutional, or\notherwise, then such corporation shall be deemed a de facto corporation\nfor the purpose of winding up its affairs and paying its indebtedness;\nand its officers shall be deemed de facto officers and shall have all\nthe powers and authority and shall perform all the functions and duties\nvested in or required of them under the law pursuant to which such\ncorporation was attempted to be created, so far as may be necessary to\nliquidate the affairs of such corporation and to pay its money\nobligations, including all the power and authority to assess, levy and\ncollect taxes upon the taxable persons and property within the corporate\nlimits of such illegal corporation, to such an amount as shall be\nsufficient to pay obligations of such corporation and the expense\nincident thereto.\n 2. Such de facto officers shall keep an accurate record of all their\nproceedings hereunder, including the amount of money raised by taxation\nand the purpose for which it was raised and the amount of money paid\nout, to whom and for what purpose. They shall audit all bills before\npayment and shall take receipts for all moneys paid out.\n 3. When all the indebtedness of such illegal corporation has been paid\nand its obligations discharged, such de facto officers shall make a\nfull, complete and accurate report, under oath, to the county judge of\nthe county in which such illegal corporation is located or to a justice\nof the supreme court of all their proceedings hereunder and on the order\nof such judge or justice approving and confirming such report, such de\nfacto officers shall be discharged and their functions and duties shall\ncease. Such report and order shall be filed in the office of the county\nclerk of the county in which such illegal corporation was located.\n